benefited from the policy was particularly important for keeping Germany’s centreright political party on board.
A coalition of political support for renewable energy rapidly grew through the
1990s (Jacobsson and Lauber, 2000, p266), created partly by the development of
vested interests, with 340,000 Germans having invested around €12 billion in
renewable energy projects by the early 2000s (Sawin, 2004, p25). There were also
political effects that worked via the strengthening of interest groups, with an
increasing professionalization of renewable energy associations, amid strong support
from the Green Party and the Ministry of the Environment (Laird and Stefes, 2009).
In addition, because renewables policy was linked to industrial policy, especially
from the late 1990s onwards, employment in factories producing wind turbines
and solar PV panels created a new constituency in favour of a strong renewables
policy, especially in the former East Germany.
This wide coalition helped to maintain and strengthen renewables policy – for
example, it was the involvement of municipalities in the 1990s that prevented the
collapse of solar PV (Jacobsson and Lauber, 2006, p266). When the first renewable
energy law was threatened by legal action by the large utilities in the late 1990s
and the government proposed a reduction in feed-in rates, the Green Party
mobilized a wide coalition of environmental groups, solar industry associations and
companies, trade unions and regional politicians to successfully oppose the changes
(Jacobsson and Lauber, 2006, p265).
Germany’s renewable policy has not been without negative feedback effects. It
provoked strong opposition from the incumbent energy companies and over time
the overall cost to energy consumers has grown, despite sharp falls in the prices of
wind turbines and solar panels. At the same time, some of the employment benefits
have evaporated as solar PV producers have been undercut by Chinese imports.
Nevertheless, despite current debates about cost, the growth of renewable energy
in Germany looks set to continue to enjoy broad support. The main political party
opposed to further expansion lost all its seats in the 2013 parliamentary elections,
and the German government pressed strongly for a national renewables target to
be part of the European 2030 package in early 2014. The new government has
introduced reforms to reduce some subsidies and spread their costs more widely,
but planned growth in renewables remains unchanged.
2
In the UK, policy took a different course. From 1989, renewable energy was
in theory eligible for support through an auctioning policy, although in practice
very little capacity was built (Mitchell and Connor, 2004). In 2003, a Renewables
Obligation (RO) was introduced, which placed an obligation on large energy
companies to source a certain proportion of generation each year from renewables.
This created a market for renewables, but with a price that was not certain, and
one which basically rewarded the cheapest technology (on-shore wind). As a result,
almost all investment in new renewable energy under the RO was by large
companies able to bear the price risk, and was concentrated in wind only (Mitchell
et al., 2006). In terms of Figure 6.1 above, while German policies had begun to
transform the structure of relationships in the sector, breaking down the distinction
92 Matthew Lockwood
A coalition of political support for renewable energy rapidly grew through the
1990s (Jacobsson and Lauber, 2000, p266), created partly by the development of
vested interests, with 340,000 Germans having invested around €12 billion in
renewable energy projects by the early 2000s (Sawin, 2004, p25). There were also
political effects that worked via the strengthening of interest groups, with an
increasing professionalization of renewable energy associations, amid strong support
from the Green Party and the Ministry of the Environment (Laird and Stefes, 2009).
In addition, because renewables policy was linked to industrial policy, especially
from the late 1990s onwards, employment in factories producing wind turbines
and solar PV panels created a new constituency in favour of a strong renewables
policy, especially in the former East Germany.
This wide coalition helped to maintain and strengthen renewables policy – for
example, it was the involvement of municipalities in the 1990s that prevented the
collapse of solar PV (Jacobsson and Lauber, 2006, p266). When the first renewable
energy law was threatened by legal action by the large utilities in the late 1990s
and the government proposed a reduction in feed-in rates, the Green Party
mobilized a wide coalition of environmental groups, solar industry associations and
companies, trade unions and regional politicians to successfully oppose the changes
(Jacobsson and Lauber, 2006, p265).
Germany’s renewable policy has not been without negative feedback effects. It
provoked strong opposition from the incumbent energy companies and over time
the overall cost to energy consumers has grown, despite sharp falls in the prices of
wind turbines and solar panels. At the same time, some of the employment benefits
have evaporated as solar PV producers have been undercut by Chinese imports.
Nevertheless, despite current debates about cost, the growth of renewable energy
in Germany looks set to continue to enjoy broad support. The main political party
opposed to further expansion lost all its seats in the 2013 parliamentary elections,
and the German government pressed strongly for a national renewables target to
be part of the European 2030 package in early 2014. The new government has
introduced reforms to reduce some subsidies and spread their costs more widely,
but planned growth in renewables remains unchanged.
2
In the UK, policy took a different course. From 1989, renewable energy was
in theory eligible for support through an auctioning policy, although in practice
very little capacity was built (Mitchell and Connor, 2004). In 2003, a Renewables
Obligation (RO) was introduced, which placed an obligation on large energy
companies to source a certain proportion of generation each year from renewables.
This created a market for renewables, but with a price that was not certain, and
one which basically rewarded the cheapest technology (on-shore wind). As a result,
almost all investment in new renewable energy under the RO was by large
companies able to bear the price risk, and was concentrated in wind only (Mitchell
et al., 2006). In terms of Figure 6.1 above, while German policies had begun to
transform the structure of relationships in the sector, breaking down the distinction
92 Matthew Lockwood